How this 10-year-old bootstrapped travel marketplace is thriving despite aggressive competitionSindhu Kashyaap
It was late Sunday evening, but Sunita Verma was hunting for things to do and planning activities for her upcoming holiday. She knew that the hotel had a concierge that would possibly help her with the tours, but she liked planning in advance.
It was a problem 38-year-old Manoj Tulsani saw with most hotels in the UAE; the guests would be able to book accommodation in advance but not the tours. Realising that people who go on holidays don’t confine themselves to hotel rooms, Manoj along with his friend Kamlesh Ramchandani decided to start Rayna Tours, in 2006.
Finding a gap in the market
Venturing outside the single-point turf of catering to in-house guests’ tour needs, Manoj began to target all the hotels without a travel outlet. They began with opening a travel outlet in Flora Grand Hotel in Dubai.
“Despite the sudden industry shift then, I found it far more intriguing to be involved with the travel industry than I had ever found the trading industry, which I originally came from,” says Manoj, a former trader and analyst.
This, however, was not that easy in the beginning due to many significant obstacles. One of the biggest challenges was learning the industry, knowing the interests of customers, and convincing the clients.
Opening new horizons
Without any reference or a viable business model to follow, the overall performance had been unpredictable. They gradually extended their services to the B2B market by creating an exclusive portfolio of their own products and unique travel services.
From just working on an offline model, Manoj realised that the company couldn’t evolve or innovate with just a direct marketing strategy. He realised that the world was going online.
They created a refined online platform to put up all their tour products, services and packages. Backed by a dedicated client support system and highly secured payment modes, it not only made their customers’ travel experience smoother and smarter, but also helped the team build more robust customer relationships.
“Moreover, at a point when social media platforms and mobile apps began to manipulate sales, we implemented pre-emptive solutions and smart strategies to pull through changes. The efforts finally paid off; what started as a modest setup with just two of us, evolved into a team of more than 30 with six to seven outlets over a course of two years,” says Manoj.
Today, bootstrapped Rayna Travels has evolved from a mere travel boutique to an industry-recognised Destination Management Company. Rayna Group is now responsible for more than 250 employees, in five locations across two countries.
Manoj adds that they started with personal savings and an investment of AED 500,000 and have now incredibly developed top and bottom line profitability, crossing AED 150 million in revenues per year.
He adds that this growth has been possible thanks to extensive analysis of market trends and knowing the demands of clients, the improvement of operational efficiency by eliminating expenses, the implementation of an effective business strategy to capitalise on their strengths, and the diversification of the business.
The team earns revenues through both online and offline bookings, the latter of which covers conventional reservations, walk-ins, and telephone and travel desk bookings.
Breaking an aggressively competitive market
The online travel and package booking space is not only growing, but practically exploding. The overseas travel industry is growing at 40 percent CAGR year-on-year. The leisure travel market in India as of today is about $80 billion annually and is set to grow to $150 billion by 2024.
One player that just cannot escape mention in the space is Makemytrip; this year the company raised $180 million from Chinese travel service provider Ctrip and it also opened its new technology centre in Bengaluru earlier this month. Cleartrip has also built a strong focus on activities and things to do.
Bengaluru-based TripFactory, the online customised store, raised Series A funding from Mohandas Pai’s Aarin Capital. Also, last April, Delhi-based travel marketplace Travel Triangle had raised $8 million in Series B funding from Bessemer Venture Partners with participation from existing investor SAIF Partners. Tripoto had raised a Series A round of funding from IDG Ventures India and existing investor Outbox Ventures.
Adding to the point on competition, Manoj says:
When you’ve many competitors, it’s important to think outside the box. Our strategy is to do things internally. For instance, most of our tours and activities do not have a middleman, which means we can assure our clients of fair prices with huge savings. Physical presence in major tourist spots is another of the company’s set apart aspects.
Apart from branches in Sharjah and Abu Dhabi, Rayna tours operates in Singapore and Malaysia and now plans to venture into other Southeast Asian destinations like Thailand.
Despite the ever-growing challenges and aggressive competition in the industry, Manoj adds that they have never compromised on the quality of service and have always believed in delivering ‘the best tours products and services with the best pricing.’
“Alternatively, a significant percentage of our business comes from good word of mouth and referrals. Now that we’ve established ourselves as one of the leading players in the UAE and India, our main focus is to fuel our infrastructural capabilities and resources to expand and grow globally,” says Manoj.